Overall strategy progress

I chose to not do any trading today, real or fake for a couple of reasons. I did check out and plotted some trade setups on the previous post. Primarily I will not be trading until the tax free account gets setup and I have submitted all of the paper work, the account is setup, cash is in transit and I am waiting on one verification step. Probably next week now.

I wanted to point out to any reading here that this is not a step by step manual to trade, although there are lots of pieces of the puzzle the one piece is experience that cannot be learned. Realizing that some time ago I have just been jotting stuff here as a bit of a trading journal. The blog platform lets me capture trades, ideas and other information in a media that allows some decent sorting and labelling for future reference.

I don't think that I even cover any particular topic well enough for it to be a real guide, perhaps just a teaser to prompt anyone interested to research further if they are interested in anything posted here, or drop me an email or leave a comment.


So on to more me stuff.

I setup spreadsheets to track my progress for fake, real and combined trading and left them separated by month. Normally each time I restart the starting balance at $5000 for each month so I do not really have a general overall cumulative idea of where I would be other than each month has been profitable and by how much. I do not want to start playing as if i have more money than I have, keep it small. I am not changing my spreadsheet plan quite yet, although I will be tracking my portfolio balance in future and I do not plan any more fake trading other than to try a new twist on an idea.

I restarted a December spreadsheet on the 19th figuring that I would be able to concentrate more on the trading over the holidays as I was taking the week off of work.

Stats:

startup capital = $5,000
days traded = 8
trades executed = 33
Balance today = $6217
Return = 24.34%
Lowest day = $53
Highest day = $366 (yesterday)

Eight days is the equivalent of two weeks trading four days a week, as is my goal. Being really optimistic and extrapolating these numbers for tha 40 week trading year (for me) is a simple return of 486.8% for the year...that's $24,340 tax free profit. Cool.

So if I have three 10% drawdowns over the course of the next three or four months, just pulling numbers out of the air here, I re-ran the spreadsheets.

There was a 5 week delay in meeting my cash return target based on the testing results, above, and an 11 week delay in my 1% per day target forecast.

I will be sizing my positions based on the account balance. A stock that trades at $25 I could trade 200 shares but a stock that trades at $26 I could only trade 100 shares (capital/price = position) and the position must be even lots of 100. So I have chosen a small range of stocks and equivalents ranging from mid $20's to just over $10. As my portfolio increases so to does my capability to trade larger positions and/or larger priced stocks.

Smaller priced stocks also allow the compounding effect to be accelerated as I can increase position size with smaller increments of cash. Over the next year that will add up quickly, as compounding does.

Jeff.